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Vive la différence! Why French quirks endure

France’s low-growth and highly consolidated banking industry might appear rigid, but jealousies and opportunism are keeping idiosyncrasies alive and kicking.


For a sector that is more centralized – more rational, even – than others in Europe, there are still many quirks to French finance. 

Yes, the big four Parisian banks control the vast majority of assets. A bank like Société Générale is particularly cohesive compared with UniCredit, which grew through rather messy Italian and German mergers. Yet further afield, there is no shortage of distinctively pungent French banks, not least in the cooperative sector, even if these groups are more integrated in France than elsewhere in Europe.

One curious variety is Crédit Mutuel – a top-three French retail group, alongside fellow cooperatives BPCE and Crédit Agricole. Tension between the eastern and western arms of Crédit Mutuel has been growing since the late 1990s, when the Strasbourg branch acquired CIC, boosting its earnings and power in the group, analysts say. CM11-CIC, as the eastern part is known, constitutes 75% of Crédit Mutuel’s assets. It has brought together most of Crédit Mutuel’s other regional units and acquired Targobank, which provides consumer finance in Germany and Spain. 


Now Crédit Mutuel’s western arm, Arkéa, is in all-out rebellion. In January, the Paris-based umbrella group launched a disciplinary procedure against the insurgents, who have been trying to leave the group in a kind of mini-Frexit. 

Based in Brittany, Arkéa covers 15% of Crédit Mutuel’s assets, including allied divisions in the southwest and Massif Central and is led by its suitably indomitable chairman, Jean-Pierre Denis. One gripe is that the chairman of the national umbrella group, Nicholas Théry, is also the head of the eastern arm, which it regards as a competitor. The west lodged a criminal complaint in Paris in 2014 (still being contested last year) over what it says is a conflict of interest.

The single supervisor’s request for less confused reporting lines is the latest spark. (Crédit Agricole, similarly, ended a shareholder loop between its regions and central office last year.) The Bretons initially refused – not sending recovery plans to the umbrella group, but directly to the French regulator and the ECB instead. Their preference is for a new central body of their own. However, aside from the question of who would then use the Crédit Mutuel brand, this requires a change in the law that locks together constituents of French mutuals through cross-guarantees. Those links have never been cut before.

If Crédit Mutuel’s story sounds like the resurgence of an old battle, France can combine old quirks with new ones: like Compte-Nickel. This rapidly growing no-frills deposit and payment card service happens to segregate its clients’ money in an account with Crédit Mutuel Arkéa. Co-founder Hugues Le Bret says he chose that bank for its open-mindedness and digital prowess (Arkéa bought e-money firm Leetchi in 2015 and last year used blockchain to identify customers). Elsewhere, meanwhile, he seems to relish an outsider’s image that might sync with Arkéa’s black-sheep status in the Crédit Mutuel group.

In a few years, Le Bret thinks Compte-Nickel’s profitability will put mainstream banks to shame, as it grows from 500,000 to 3 million clients: way more than France’s biggest online banks today, including SocGen’s Boursorama, which he used to run. Ultimately, credit and insurance partners could make it the Amazon of fintechs, as it expands to SMEs and abroad.


But the quirk, and the lynchpin of Compte-Nickel’s success, lies in a distribution agreement with the union representing France’s tabacs. These are often gritty locales, selling coffee and beer, newspapers and sports betting, as well as nicotine. The tabacs saw a way to improve their image and stem their decline. At the same time, Compte-Nickel’s co-founder Ryad Boulanouar provided the brains for physical devices in the tabacs after setting up electronic ticketing for Paris’s public transport system. The idea was a bank account that was cheaper, simpler and fairer.

Boulanouar has spoken of his humble background and exclusion from the banking sector. Le Bret, likewise – with his smart suit and slicked-back grey hair – wrote a book about being SocGen’s head of communications during the Jérôme Kerviel rogue-trading affair. He says CEO Frédéric Oudéa told him to choose between Boursorama and publishing the book, so he quit. Never missing an opportunity, Le Bret has since written another book about Compte-Nickel. The cover blurb says the “system made him pay” for his previous book. 

He tells Euromoney his book is about management: “It is not against the system, but about its failures.” 

He holds no grudges against Oudéa. His background at Boursorama gives him credibility. He has investors lining up and raised €39 million from Partech Ventures last year. We meet in a trendy co-working space, nestled nicely near the normal Parisian investment banker hang-outs. 

Savvy French capitalists, it seems, can play the country’s quirks, while benefiting from change. For Le Bret, technology and Europe – with the single directive on payments – is opening up his market.

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